markettrend766
14-09-2008, 09:30 PM
MUNDRA PORT LTD:
CMP:534
TARGET:717.23
TIME HORIZON 12 MONTHS
• Mundra Port is an operational port with natural draft depth in the range of 15-32 meters at a short distance from shore, enabling it to handle large-sized future generation vessels. There are no major ports in India, either in the public or the private sector, with such a huge natural draft depth. As a result, only Mundra port is currently able to handle large new generation ships such as container liners of up to 8,000 twenty-foot equivalent units (TEUs) and modern capesize vessels (ships).
• Port congestion in competing peer ports in the northern part of the western coast gives a natural advantage to Mundra Port. It currently has relatively lower congestion. The distance to northern hinterland is also shorter. This provides Mundra Port a strong growth opportunity.
• Railways and roadways are important links for transportation of goods to and from any port to the cargo centres. Strong port connectivity by both rail and road; access to hinterland; and operational efficiency compared with its peers on the west coast, specially in Gujarat and Maharashtra, give an edge to Mundra Port in attracting cargo. With a capability of handling large bulk cargo vessels of more than 50,000 dead weight tonnage (DWT) equipped to handle approximately 20,000 tonnes of bulk cargo per day, the port’s vessel turnaround time was as low at 2.4 days in the quarter ended June 2007. Similarly, the vessel turnaround time at Container Terminal I stood at 14.5 hours, close to the average vessel turnaround time of 13 hours in leading ports in Asia, in the 15 months up to June 2007.
• Strategic relationship with customers through long-term contracts assures stable cargo traffic and regular cash flow. Mundra Port & SEZ has long-term contracts with Indian Oil Corporation for providing port services. Similar agreement has also been inked with Guru Gobind Singh Refinery (GGSRL), a subsidiary of Hindustan Petroleum Corporation (HPCL), for single-point morring facilities and 310 acres of land for a crude-oil terminal at Mundra. Similar long-term port service agreements have been signed with Tata Power and Adani Power.
• Mundra Port &SEZ is setting up a coal-handling jetty with a capacity of 30 million tonnes per annum to take care of the coal imports of about 22 million tonnes required by the Mundra ultra mega power plant (UMPP) of Tata Power and the 2,640-MW Mundra power project of Adani Power.
• The around 15,665 acres of land that is owned by Mundra Port & SEZ includes the development and usage rights granted for 3,404 acres around Mundra Port under concession agreement for 30 years. Further, it also includes 2,658.2 hectares (or about 6,568 acres) of area notified as SEZ. In addition, it also has approximately 4,000 metres of undeveloped waterfront land it can utilised in growing its own port operations.
• Freedom in fixing tariff is one of the major advantages enjoyed by Mundra Port & SEZ when compared with other major ports in the country that take orders from the Tariff Authority for Major Ports.
Valuations.
MPSEZ reported Q408revenues a head of estimates at 3.3bln,driven by robust volumes of 8.5mlm tons handled at mundra port and rs 911mn of revenues from lease land in the mundra sez booked during the quarter.EBIDTA MARGINS for the quarter were at a robust 71.5%,led by higher volumes of food grains handled and revenues from high margins SEZ land leseas, resulting in EBIDTA of 2.5bln.MPSEZhas decided to avail of 10 years tax-holiday benefits under section (801iab) as an SEZ developer commencing from FY08.accordingly the company has reversed current tax of 62mln in Q4FY08 PAT.
hence we recommend to buy the stock with a price target of 717.currently the stocks trading at 530
MARKETTREND766
DESIDATA TEAM
CMP:534
TARGET:717.23
TIME HORIZON 12 MONTHS
• Mundra Port is an operational port with natural draft depth in the range of 15-32 meters at a short distance from shore, enabling it to handle large-sized future generation vessels. There are no major ports in India, either in the public or the private sector, with such a huge natural draft depth. As a result, only Mundra port is currently able to handle large new generation ships such as container liners of up to 8,000 twenty-foot equivalent units (TEUs) and modern capesize vessels (ships).
• Port congestion in competing peer ports in the northern part of the western coast gives a natural advantage to Mundra Port. It currently has relatively lower congestion. The distance to northern hinterland is also shorter. This provides Mundra Port a strong growth opportunity.
• Railways and roadways are important links for transportation of goods to and from any port to the cargo centres. Strong port connectivity by both rail and road; access to hinterland; and operational efficiency compared with its peers on the west coast, specially in Gujarat and Maharashtra, give an edge to Mundra Port in attracting cargo. With a capability of handling large bulk cargo vessels of more than 50,000 dead weight tonnage (DWT) equipped to handle approximately 20,000 tonnes of bulk cargo per day, the port’s vessel turnaround time was as low at 2.4 days in the quarter ended June 2007. Similarly, the vessel turnaround time at Container Terminal I stood at 14.5 hours, close to the average vessel turnaround time of 13 hours in leading ports in Asia, in the 15 months up to June 2007.
• Strategic relationship with customers through long-term contracts assures stable cargo traffic and regular cash flow. Mundra Port & SEZ has long-term contracts with Indian Oil Corporation for providing port services. Similar agreement has also been inked with Guru Gobind Singh Refinery (GGSRL), a subsidiary of Hindustan Petroleum Corporation (HPCL), for single-point morring facilities and 310 acres of land for a crude-oil terminal at Mundra. Similar long-term port service agreements have been signed with Tata Power and Adani Power.
• Mundra Port &SEZ is setting up a coal-handling jetty with a capacity of 30 million tonnes per annum to take care of the coal imports of about 22 million tonnes required by the Mundra ultra mega power plant (UMPP) of Tata Power and the 2,640-MW Mundra power project of Adani Power.
• The around 15,665 acres of land that is owned by Mundra Port & SEZ includes the development and usage rights granted for 3,404 acres around Mundra Port under concession agreement for 30 years. Further, it also includes 2,658.2 hectares (or about 6,568 acres) of area notified as SEZ. In addition, it also has approximately 4,000 metres of undeveloped waterfront land it can utilised in growing its own port operations.
• Freedom in fixing tariff is one of the major advantages enjoyed by Mundra Port & SEZ when compared with other major ports in the country that take orders from the Tariff Authority for Major Ports.
Valuations.
MPSEZ reported Q408revenues a head of estimates at 3.3bln,driven by robust volumes of 8.5mlm tons handled at mundra port and rs 911mn of revenues from lease land in the mundra sez booked during the quarter.EBIDTA MARGINS for the quarter were at a robust 71.5%,led by higher volumes of food grains handled and revenues from high margins SEZ land leseas, resulting in EBIDTA of 2.5bln.MPSEZhas decided to avail of 10 years tax-holiday benefits under section (801iab) as an SEZ developer commencing from FY08.accordingly the company has reversed current tax of 62mln in Q4FY08 PAT.
hence we recommend to buy the stock with a price target of 717.currently the stocks trading at 530
MARKETTREND766
DESIDATA TEAM